Gaming Commission imposes stricter requirements on slot parlors like Dotty’s
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Nevada Gaming Commissioner Tony Alamo asks Michael Eide and attorney Patty Becker, representing Dotty’s Gaming & Spirits, a series of questions regarding the establishment, Thursday, Aug. 25, 2011. The commission heard arguments by Dotty’s regarding a change to state gaming regulations.
Thursday
25 August 2011
9:18 p.m.
The Nevada Gaming Commission on Thursday amended its regulation for licensing small casinos, placing more requirements on establishments like the Dotty’s chain.
The amended regulation will require slot parlors like Dotty’s to build new amenities within two years to maintain their licenses.
Dotty’s caters primarily to women who don’t like traditional bars and taverns.
Under terms of the revised Regulation 3.015, licensees will now be required to have a permanent bar with seating for at least nine customers, a contract or service agreement with a licensed liquor distributor and facilities to serve alcohol by the drink, and a restaurant of at least 2,000 square feet with seating for at least 20 customers. Establishments also must be open at least 12 hours a day, if the company wants to have more than four slot machines. With a restricted license for small operations, companies can have up to 15 slots.
Representatives of Dotty’s, the company that has been linked to the debate, haven’t indicated what their next move will be. When Clark County passed an ordinance listing similar requirements, the company filed a lawsuit.
Dotty’s chief operating officer, Michael Eide, estimated remodeling its 60 properties in the chain could cost the company $6 million.
Eide said rearranging plumbing, electricity and flooring and adding the required amenities would cost about $100,000 per location. Some Dotty’s locations don’t have kitchens and are not staffed for food service.
The final vote was 4-1 in favor of amending the regulation, with commission Chairman Peter Bernhard voting against the measure.
Thursday’s vote concluded several months of debates, public hearings and four drafts of the regulation, one each from Gaming Control Board Chairman Mark Lipparelli, the Nevada Resort Association, the Nevada Tavern Association and Commissioner Tony Alamo.
The two associations pressed for the regulatory change because they felt it was unfair for Dotty’s and several imitators to be licensed to have slot machines but not have to provide the types of amenities non-restricted licensees must offer.
Representatives of Dotty’s and similar establishments countered that the Gaming Commission has approved licenses using the Dotty’s business model for years and that it has only become an issue in the last couple of years because the model has taken customers away from struggling locals casinos hurt by the economy.
Some critics say the Resort Association is using the influence of big gaming establishments to slap down a new and innovative business model.
Dotty’s attorney Patti Becker told commissioners that Dotty’s has been in business since 1995, starting as an untested business model. Initially, the concept didn’t make any money, she said, but owners invested $60 million and built a chain of 50 locations.
Becker said her client was an example of how a company doesn’t have to have scantily clad women to sell a product. Becker also told the all-male commission that men view taverns differently than women, and the Dotty’s business model works because the 40- to 60-year-old women who play there don’t have to worry about being hit on by male customers.
Patrons want a laid-back, cozy atmosphere where they can meet with friends and play slot machines, she said. Dotty’s establishments are adorned with kitschy knick-knacks that its older players enjoy.
Becker showed commissioners enlarged photos of Dotty’s customers and bartenders and compared them with servers at other properties.
Eide said six of the company’s servers are in their 70s.
Becker also referenced Las Vegas Sun gaming reporter Liz Benston’s March 29 story about the Dotty’s environment and the company’s customers.
Representatives of the Resort Association, meanwhile, said they were satisfied with the regulatory changes approved by the commission, even though they weren’t as tough as they would have liked.
Attorney Sean Higgins for the Tavern Association and Todd Bice for the Resort Association said they wanted stricter amenity standards for restricted licensees to be fair to their respective members.
But Bernhard said one of his concerns was that the cost to licensees, particularly those in rural counties, would be so high that it would put those types of taverns out of business.
“We wanted to set up some bright lines to clarify these requirements,” Bice said.
“But those ‘bright lines’ could preclude operations in places like Esmeralda County,” Bernhard countered.
A provision in the revised regulation could solve that problem. Under the regulation, an applicant could seek a waiver from any requirement, and the state Gaming Control Board and the Gaming Commission could rule on waivers on an individual basis.
It could be several months before regulators start seeing any waiver requests.
Lipparelli said there could be as many as 40 license applications that would be affected by a new regulation.
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Once again, we see entities that want to keep that monopoly, keep your hard-earned money and screw the little guy, the middle class, and never mind what the people want. Stations' machines are so tight that if you don't play pennies, which can get really expensive, or dollar machines, yea right, you don't win anything! Not even break even.... So, a smaller place with maybe, just maybe a little looser slots, attracts a few customers away from Stations and BAM! lawsuit, backroom payouts, pockets lined and we are back to a monopoly....sound familiar: Nevada Energy - monopoly: Southwest Gas - monopoly: Republic Services - monopoly: Souther Nevada Water District - monopoly..... So if I want A/C, or if I want to cook or bake, if I want to drink some water or flush my toilet, it I want trash pick up and sewer service, I pay what they want me to pay, when they want me to pay and AS MUCH as they want to charge or I don't live...period. If I could sell my house I would be out of here tomorrow. I've lived here over 40 years and each and every year NV Power, Energy, whatever, seems to continue to get three, four, sometimes five rate hikes in a single year, every year, with no justifications, just pay up or get out. No one, no business, seems to give a crap about human beings anymore just the almighty dollar and for one, I'm sick of it. Wonder if I move to Canada, walk away from my home, if the banks and mortgage companies, the power companies, etc., can follow me there!?? lol I might be willing to try.... Station casinos are a joke, their shareholders rich beyond belief and I for one, hope Dotty's attorney's are worth their salt and counter sue for a change and hope they win! (for a change...) Good luck!
And these regulations have what to do with honest games honestly run?
This ruling appears onerous, in fact making these small casinos operate a restaurant, which is a risky type of business. Given the apparent fact that licenses were granted for places like Dotty's, it seems to me that it would have been a fairer decision to grandfather existing locations, and make the new rules apply only to new applicants.
This harsh ruling even makes me suspicious that perhaps the regulators are overly influenced by powerful interests out to squelch pesky competition.
Almost every change in our State's history has a "grandfather clause". Though I disagree with this entire decision, I would certainly think this is a place for that Grandfather clause.
Peeps, we have allowed the big boys the ability to change restaurants and bars to have only a few slots, thus, killing many of them off. We have allowed them to require neighborhood casinos to have rooms, this killing off the little mom and pops that grind away to get the neighborhood business. (Oh, and many of them had Grandfather clauses to exist until change.)
Kill all dreams..you know, there would have not been a Horseshoe, or El Cortez or any downtown for that matter. A lot of strip joints and neighborhoods casino's got their starts from little dreams. THIS SUCKS BIG TIME AND REEKS OF STENCH BEYOND BELIEF.
Bring business to Nevada, hire 600+ employees, put contractors to work, and what does that get you? An award for excellence right? Not here, it brings bad press and regulation changes from brilliant doctor like Tony Alamo. The good ol' boy club wins in this state. I sure hope that the commisioners enjoy thier time at the Fretita's beach house in Laguna Beach. This is one less person that will be walking through the stations doors. Not even to eat. I still love thier We Love Locals campaign. Maybe they should look to Dotty's for advice, rather than try to put them out of business. They even told us that 'We have loosened our slots,' telling everyone that they were tightened. They sure have some high level execs making the right decisionsl.
"Dotty's caters primarily to women who don't like traditional bars and taverns."
So this gaming commission makes a new regulation requiring them to be the opposite of what their average customer wants. Who exactly was being injured in any way by their current business model? No one? Then this one is waaaay into the red on the B$ meter.
I hope Dotty's hired attorneys who know their way around estoppels.
"I heartily accept the motto, 'That government is best which governs least'; and I should like to see it acted up to more rapidly and systematically." -- Henry David Thoreau 1849 "On the Duty of Civil Disobedience"
The grandfather clause should be enacted for the existing establishments. Dotty's licenses were approved year after year until the "big boys" started complaining. I think that Clark County, the state and the city (where applicable) all enjoyed receiving the license fees and taxes from Dotty's year after year after year. If this was an issue why would they approve the licenses in the first place?
I say boycott Station casinos.
I do not frequent Dotty's although my wife does from time to time. Somehow I don't think that Dotty's will be able to pay up to $100K per location to remodel and we will end up with more vacant properties and the folks working there will become unemployed. Is this what we really need at this fragile time in our economy?
I also thought that the fair thing to do would be to grandfather the existing 'Dottys' and from hence forward any new establishment would have to conform to present guidelines. Whether people like the idea of government pushing little businesses around or not is inconsequential as the fact is that Dottys is by NO stretch of the imagination being run as a tavern w/gaming as a secondary source of revenue. Dottys is a classic example of what a 'slot parlor' is - not what a tavern is. Dottys needs to cough up at the proper taxation levels also.
This is the same Gaming Commission that stood by and did nothing when Harrah's Entertainment Inc's massive illegal remodels were exposed for all to see. And the fact that tens of thousands of people were exposed to asbestos, a known carcinogenic, didn't get the Gaming Commission's attention either. In summation, Harrah's Entertainment Inc under the fine leadership of Gary Loveman knowingly, intentionally & willfully illegally remodeled thousands of their hotel rooms, leaving every single room that they touched unsafe for the public to stay in for a period spanning more than a decade and the Gaming Commission did...NOTHING! Lesson learned if you are Harrah's and have the Gaming Commission in your pocket you can & will get away with anything & everything in Nevada. Where are the FEDS? This is called CORRUPTION and needs to end.
I agree. Grandfather in existing locations and make the requirements for future entities. How does one voice their opinion to the Gaming Commission? Screw Station Casinos. I am tired of their antics to monopolize the market with whatever means it takes, legal or otherwise.
azsk8fan: What is the main source of revenue at PT"s or any other bar in this state? Would any bar/tavern/slot parlor be in business if they didn't have gaming. PT's has a busy bar and restaurant at a few locations. Take away gaming from those spots, they would go out of business. No one makes money on bar food, pool games, or darts. And DOtty's and PT's, along with every other tavern, pay taxes on a fee based system. Locations that have over 15 games pay based on revenue. The state and the gaming control board made it like that. Dotty's will not need to pay more fees or additional taxes from this new regulation. The state and the tax payers recieve nothing from this. The only people that win here are the stations lawyers. They will not gain any business from shutting down Dotty's expansion. What they should do is give Dotty's 5 more games at each tavern they run, and tax them as a casino. That way the state would gain some extra income, and do something good for the state. The way they did it affects Tony Alamo's pocket and that's it.
jaquekeno: Go ahead and go to the gaming commission meetings. They are generally the last thursday of the month, starting at 9:30 am. They open with public comments and you can say whatever you want. Just don't swear!
The Gaming Commission has absolutely NO JURISDICTION on how any company should run. Companies routinely design themselves for a niche customer base and cater to that base and Doty's is no different.
The large casinos complain about how Government creates expensive regulations for them and tells them how to run their business - here they are doing the same. What hypocrites. This Gaming Commission should be investigated by a Grand Jury for conflict of interests.
Yep, this is bought-and-paid-for, good-ol'-boy government at work. Our society is plagued by too many lawsuits. But this corrupt commission ruling just screams for redress. Sue and obliterate this garbage. Dotty's and like establishments (mostly little guys) are unfairly being squashed and all the consumers who enjoy what these little places provide are being squashed. Meanwhile, the good ol' boys and their paid-for lackeys on the commission must be popping the Dom Perignon.
Choice is good for the consumer. Regulating Dottys' out of existence is good for their mega corp. competitors. It's obvious who the gaming commission works for. Shameful.
If Dotty's and similar establishments are operating under a tavern license, make them operate as a tavern with all of the rules, regulations and taxes that go with that tavern license. If Dotty's and similar establishments are slot parlors, license them as slot parlors and make them operate as such with all of the rules, regulations, and taxes that go with a slot parlor license. Really simple..operate within the parameters of your license.
You can run your casino $20 billion in debt, remodel 19 floors of the hotel without a permit, or file bankruptcy the gaming board sees no problems... But try to offer the customer what they want in a convenient location and stay profitable, and the gaming board suddenly has issues???
VegasMark,
That's it. These "regulatory bodies" only regulate when the powers-that-be need something. Really -- Who the hell cares how many slots a place on the corner has, or if they have a kitchen or not? Let the businesses and the customers figure that out.
Where are any of the finger-wagging "NO Nanny Government" crowd, now that there is a legitimate abuse taking place??
Dotty's is a cash cow and easily afford to retrofit into gambling places into taverns. The gaming commission is right on target and I agree with this ruling. Let Dotty's sue anybody they like; the attorneys are looking for work anyway.
The Nevada Gaming Control board thought Dotty's business model was a great idea in 1995. Thanks to the Nevada Resort Association, pushed by Station Casinos, (or is it "New Stations LLC"?), Dotty's will need to spend $6 million to meet the new regulations.
I totally agree with updating old, out of date regulations. Case in point; When I was managing OTB's in Pittsburgh, buried deep in the pages of the regulations and forgotten about was a sentence forbidding the simulcasting of and betting on Arabian horse races. We needed to make sure that during a race card we knew which races were Arabian and turn off the simulcast. There were reasons in the regulations that were archaic. Rules such as these need to be addressed.
Gaming Commission Chairman Pete Bernhard, who was the only member to vote against the revisions, had a great quote, "You don't use a sledgehammer to solve this ant of a problem". Thanks, Pete. Stations and other gaming properties were worried about Dotty's cutting into the locals market. Yes, Dotty's has been treated a little differently by the commission. But the reason for this regulation update are for the wrong reasons.
I understand the squeeze in the economy, the locals market decline, etc. This is when management, marketing, and all of the qualified brain trusts hired by the properties need to do their respective jobs. Create something new and exciting. Concentrate on Customer Service. Know your guest and keep them loyal. The gaming market is no different from retail, guests can spend their money anywhere. What are you going to do to keep them coming back?
The Taverns now have a level playing field. This is good. The regulations needed to be updated. It will be interesting to see the numbers from Stations and the other properties when Dotty's conforms. I'll wager it will not make much of an impact.